Posted on 10/19/2010 11:13:59 AM PDT by goldendays
When it comes to accounting, the devil is in the details.
A new Financial Accounting Standards Board (FASB) rule taking effect in December requires greater transparency for union pension plans and threatens to bankrupt organized labor.
In order to survive, unions need a bailout and fast.
This presents a political problem -- if unions go bankrupt, so do Democrats. Eleven of the top 20 largest political contributors are labor unions, and nearly all of that money is spent campaigning against Republicans.
By bailing out unions, Democrats are bailing out themselves.
Unions have known for years that their multiemployer pension plans have unfunded liabilities that could run hundreds of billions of dollars.
That's why unions have been loath to accurately report their pension liabilities -- requiring transparency could devastate whole industries as banks and creditors will likely refuse to lend money to companies on the hook for such outrageous pension obligations.
Fortunately for them, it's much cheaper for unions to buy the White House and Congress than to fund their pensions properly. Even by their normally profligate standards, unions went for broke in 2008, spending $400 million electing Democrats.
In 2010, "Democrats are relying more than ever this year on another outside force to help even the playing field: organized labor," reports the New York Times.
Despite being beholden, Democrats have been unable to enact the two laws unions most desire.
Democrats pushed hard but unsuccessfully for Card Check. That legislation would remove the secret ballot in union elections. By making union votes public, labor organizers would know who to target and intimidate in order to pressure them to change their vote.
With new unions, they could use mandatory binding arbitration to force additional businesses to infuse cash into their failing multiemployer pension plans.
The other piece of legislation is, not surprisingly, a bailout bill offered by Sen. Bob Casey, D-Pa., and co-sponsored by Senate Majority Whip Richard Durbin, D-Ill. (A similar piece of legislation is being offered in the House by Rep. Earl Pomery, D-N.D.)
The bill would make failing union pension plans fully backed by the Pension Benefit Guaranty Corp., a government-sponsored entity.
In the plain language of the bill, "obligations of the corporation which are financed by the fund created by this subsection shall be obligations of the United States."
It creates a fund that these pension plans will be able to go to that will be filled by taxpayer funds as needed through the normal appropriations process.
In this sense, Casey's bill is an entitlement for the 7 percent of Americans still in labor unions. There is literally no dollar figure in the bill, but the PBGC had a deficit of $21 billion last year and it's estimated that shoring up failing union pension plans could cost taxpayers another $165 billion.
Rather than make union managers and businesses accountable for their pension mismanagement, these plans would have the full backing of the federal government, removing financial pressures to make the plans fiscally responsible. In the Daily Caller, a Capitol Hill Republican compares the arrangement to Fannie Mae and Freddie Mac's disastrous backing of the housing market.
With Republicans likely to control at least one chamber of Congress after November and post-census redistricting helping the GOP retain control, a lame duck session could be the Democrats last chance to save unions and help keep their campaign coffers filled.
The question is: Will Republicans be able to stop another special-interest bailout before January? If they succeed, it could be the beginning of the end for unions as an influential political force.
Eleven of the top 20 largest political contributors are labor unions, and nearly all of that money is spent campaigning against Republicans...
To the people of Utah - Never count your Hatch before he chickens:)
thanks goldendays.
City of Bell Police Union Asks for $71 Million Federal Bail-Out From Congress [Whoa!!!]
Bell Police Officer’s Union and the Municial Employees Union, AFSCME | 10-19-10 | BASTA
Posted on 10/19/2010 6:35:42 AM PDT by joinedafterattack
http://www.freerepublic.com/focus/news/2610286/posts
Defined contribution plans with proper trust management will work on an ongoing basis but the trust management must be entirely separated from union officers.
Unions need a bailout because they have already looted their pension funds in order to fill DNC coffers. Can you say ‘Misappropriation of Funds’?
Good one. And so true. Anyone that was a friend of Teddy_________________. (fill in the blank)
Pffttt!
and Hell no and more hell no. LOL
Do you (or anybody else reading this) know the parameters for qualifying a plan for the Pension Benefit Guaranty Corp.? I believe a number of bankrupt airline pension plans fell into this bucket, and for whatever reason, I assumed that this “safety net” applied to the pension plan of any entity that went bankrupt, regardless.
PBGC is a federal corporation created by the Employee Retirement Income Security Act of 1974. It currently protects the pensions of more than 44 million American workers and retirees in more than 29,000 private single-employer and multiemployer defined benefit pension plans. PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.
Perhaps unions need to cap pensions to the extent that they are funded. Why rob social security to pay unions. Some of those union guys probably do or will draw SS as well as their pensions.
They should fully fund their own pension programs without tax dollars.
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